Contraction  the  Road  to  Bankruptcy — Not  to  Resumption. 


SPEECH 


HON.  WILLIAM,  D.  KELLEY, 

\ 

OF  PENNSYLVANIA, 


DELIVERED 


IN  THE  HOUSE  OF  REPRESENTATIVES, 


JANUARY  IS,  1S6S. 


WASHINGTON: 

F.  &  J.  RIVES  &  GEO.  A.  BAILEY, 

REPORTERS  AND  PRINTERS  OF  TIIE  DEBATES  OF  CONGRESS. 

1868. 


t 


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# 


332,  nm 

Kite. 


/ 


I 

CONTRACTION  AND  TAXATION. 


I 


The  House  beinerin  the  Committee  of  the  Whole  on 
the  state  of  the  Union — 

Mr.  KELLEY  said: 

Mr.  Chairman:  War  is  not  an  unmitigated 
evil.  It  calls  into  action  the  worst  of  human 
passions  and  the  highest  of  human  virtues.  It 
contrasts  the  spirit  that  conceived  and  gloated 
over  the  horrors  of  Libby,  Belle  Isle,  and 
Andersonville,  by  the  uncomplaining  patriot¬ 
ism  and  fortitude  with  which  those  horrors 
were  endured.  It  may  be  called  the  science 
of  destruction,  yet  it  develops  the  germs  of 
future  prosperity,  evokes  wealth  from  unrecog¬ 
nized  sources,  and  frequently  leaves  commu¬ 
nities,  which  for  the  time  it  seems  to  have  deci¬ 
mated  and  desolated,  richer  than  they  were  in 
the  peaceful  seasons  which  preceded  it.  This 
is  not  often  true  of  mere  dynastic  wars,  but  of 
such  as  involve  a  question  between  forms  of 
government  or  are  waged  for  the  transfer  of 
territory  from  an  oppressive  to  a  liberal  gov¬ 
ernment  it  is  almost  an  invariable  consequence. 

The  unparalleled  struggle  through  which  we 
have  gone  was  of  the  latter  class,  and  illus¬ 
trates  most  forcibly  the  truth  that  in  God’s 
providence,  so  often  inscrutable,  war  has  its 
purposes.  We  mourn  hundreds  of  thousands 
of  the  prematurely  dead,  among  whom  were  the 
bravest,  best,  and  most  beautiful  of  the  circles 
in  which  they  moved.  The  maimed  soldier 
meets  us  at  every  turn  in  the  bustling  highway, 
and  the  widows  of  those  who  fell  for  our  coun¬ 
try  have  not  yet  laid  aside  their  wee'ds  or  their 
tender  children  lost  the  memory  of  the  linea¬ 
ments  of  him  they  loved,  and  who,  but  for  his 
patriotism,  might  have  lived  to  shield  them  from 
the  ills  they  endure  in  poverty  and  orphanage. 
They  suffer,  but  the  people  in  whose  cause 
they  suffer  were  richer,  more  powerful,  and 
consequently  abler  to  endure  additional  taxa¬ 
tion,  on  the  19th  of  April,  1865,  when  Johnston 


surrendered,  than  it  was  on  the  14th  of  April, 
1861,  when  the  guns  of  the  rebellion  opened 
on  Fort  Sumter. 

Mr.  Chairman,  I  venture  the  assertion,  and 
doubt  not  that  history  will  demonstrate  its 
correctness,  that  the  war  for  the  suppression 
of  the  rebellion  developed  a  productive  power 
in  the  country  more  than  equal  to  the  indebt¬ 
edness,  national,  State,  and  municipal,  incurred 
in  support  of  it  and  by  the  payment  of  bounties 
and  pensions.  And  when  gentlemen  speak  of 
securing  the  results  of  the  war  I  ask  them  to 
regard  this  fact,  and  to  see  to  it  that  it,  as  well 
as  the  purely  political  results  of  the  struggle, 
be  secured,  in  order  that  those  who  survive  its 
victims  may  share  its  happier  consequences. 
The  policy  which  had  with  rare  and  brief  inter¬ 
vals  controlled  the  legislation  of  the  country 
from  its  foundation  to  the  opening  of  the  rebel¬ 
lion  was  not  calculated  to  develop  the  resources 
or  improve  the  condition  of  the  laboring  people 
of  the  country.  It  did  not  aim  at  these  results. 
It  was  conceived  and  enforced  by  those  whose 
interests  were  peculiar  and  adverse  to  the  gen¬ 
eral  prosperity.  Under  the  ancient  r6ghnt  the 
legislative  power  of  the  country  resided  for  more 
than  sixty  years  in  a  Democratic  congressional 
caucus,  the  preponderance  in  which  of  the  slave¬ 
holders  of  the  South  was  almost,  if  not  abso¬ 
lutely,  without  intermission.  Controlling  the 
caucus  of  the  dominant  party,  they  controlled 
the  legislation  of  Congress,  and  except  in  the 
brief  periods  from  1825  to  1833  and  from  1843 
to  1847  the  policy  of  the  caucus  was  to  prevent 
the  diversification  of  employments,  impair  the 
demand  for,  and  so  diminish  the  wages  of.  free 
labor,  and  by  compelling  the  masses  to  engage 
in  the  production  of  provisions  to  so  cheapen 
them  as  to  make  it  to  the  advantage  of  the  slave¬ 
owner  to  produce  nothing  but  leading  staples, 
and  depend  upon  the  farmers  of  the  North  for 


4 


cheap  food  for  themselves,  their  animals,  and 
slaves.  It  was  their  aim  to  make  mechanical 
labor  unprofitable  and  degrading,  that  they 
might  be  able  to  discourage  immigration  by 
contrasting  the  condition  of  the  well-fed  slave 
with  that  of  the  laborer 'of  the  North,  who  in 
f reedom  should  by  the  exercise  of  his  skill  be  able 
to  obtain  ’out. a  precarious  support  for  himself 
and  family.  I  do  not  make  this  arraignment. 
History  presents  it.  That  remarkable  southern 
book,  “  Cotton  is  King,”  is  but  an  elaboration 
of  it  running  through  well-nigh  a  thousand 
finely-printed  pages ;  and  in  his  remarkable 
address  at  the  .close  of  the  grand  fair  of  the 
Mechanics  and  Agricultural  Fair  Association 
of  Louisiana,  held  in  the  city  of  New  Orleans 
November,  1866,  one  of  the  ablest  writers  and 
most  cogent  thinkers  of  the  South,  William 
M.  Burwell,  Esq.,  in  their  behalf,  pleaded 
guilty  to  it  when,  in  stating  “such  points  of 
southern  opinion  and  policy  as  bea#  upon  the 
causes  of  subjugation,”  he  thus  enumerated 
them : 

“  1.  That  the  Federal  Government  had  no  right  to 
administer  any  duties  save  those  which  were  written 
down  in  its  charter. 

“2.  That  staple  culture  by  slave  labor  was  the 
most  honorable,  the  most  virtuous,  and  the  most 
military  system  of  State  polity. 

“3.  That  commerce,  the  mechanic  arts,  and  the 
banking  system  were  incompatible  with  the  social 
safety  of  the  slave  States,  and  tended  to  disparage 
the  high  standard  of  virtue,  courage,  intellect,  and 
patriotism  which  accompanied  the  pursuits  of  agri¬ 
culture  and  the  institution  of  slavery. 

“4.  That  great  cities  were  great  sores,  aggrega¬ 
tions  of  people  an  evil,  immigrant  numbers  and 
capital  not  desirable,  and  works  of  internal  com¬ 
merce,  only  to  be  allowed  where  they  were  built  at 
the  private  cost  of  those  who  used  them.  The  ocean 
was  regarded  as  '  a  sceneof  strife,’  and  it  was  thought 
our  ships  and  workshops  should  be  stationed  beyond 
the  Atlantic.” 

Concise  as  these  propositions  are,  they  pre¬ 
sent  a  comprehensive  statement  of  the  policy 
of  the  leaders  of  the  Democratic  party.  They 
were  foes  to  commerce  and  the  mechanic  arts, 
and,  in  view  of  the  extent  of  our  country, 
its  boundless,  varied,  and  equally-distributed 
natural  resources  succeeded  to  a  degree  that  is 
almost  incredible  in  stationing  11  our  ships  and 
workshops  beyond  the  Atlantic.”  In  the  south¬ 
ern  theory  of  society  the  free  laboring  man  had 
no  place ;  its  philosophy  gave  him  no  consid¬ 
eration.  It  regarded  him  as  a  nuisance,  an 
interloper,  who  had  no  place  in  a  well  regu¬ 
lated  State.  In  its  ideal  republic  there  were 
to  be  two  classes  of  people  only  :  the  wealthy 
producers  of  agricultural  staples  and  laborers, 
the  slaves  they  owned  and  upon  the  sweat  of 


whose  brows  and  by  the  sale  of  whose  offspring 
they  should  live. 

But  so  great  were  our  natural  advantages, 
so  ingenious  our  people,  and  so  largely  was 
American  industry  and  inventive  power  pro¬ 
tected  by  our  patent  laws,  that  in  spite  of  legis¬ 
lation,  which  produced  commercial  crises  with 
almost  regular  periodicity,  the  manufacturing 
interests  of  the  North  had  come  to  be  very  con¬ 
siderable.  We,  however,  still  remained  a  com¬ 
mercial  dependency  of  England,  and  were, 
indeed,  her  principal  and  most  profitable 
dependency;  and,  sir,  we  continue  to  be  such, 
notwithstanding  the  enormous  development  of 
our  productive  power  during  the  war,  as  is 
shown  by  the  official  statement  of  the  exports 
from  the  United  Kingdom  to  the  various  coun¬ 
tries  of  the  world  during  the  first  half  of  the 
last  two  years.  In  introducing  this  table  the 
compiler  remarks  that  there  has  been  a  con¬ 
siderable  falling  off  in  our  American  trade 
during  the  last  year,  owing  chiefly  to  the  pro¬ 
hibitory  tariff  and  the  scanty  harvest  of  1866. 
It  appears  that  the  exports  from  the  United 
Kingdom  to  her  two  greatest  dependencies  in 
the  periods  designated  were  : 

1866.  1867. 

To  India . £9,406,838  £10.135,920 

To  tho  United  States . 15,223,220  11,951,179 

India  stands,  in  the  exhibit  from  which  I 
obtain  these  figures,  at  the  head  of  the  list  of 
her  colonial  customers,  and  the  United  States 
heads  the  column  of  foreign  dependents. 

Sir,  it  would  weary  the  committee  were  I  to 
bring  to  its  attention  the  many  illustrations  that 
occur  to  my  mind  of  the  wondrous  increase  of  our 
productive  power  during  the  war,  but  I  beg  you 
to  bear  with  me  while  I  submit  a  few  of  them. 
The  war,  endeavor  to  disguise  it  as  we  may, 
was  an  irrepressible  conflict  between  two  sys¬ 
tems  of  labor,  one  of  which  regarded  the  laborer 
as  a  thing  to  be  owned,  and  the  other  of  which 
recognized  his  manhood,  kindled  his  hope,  and 
quickened  his  aspirations  by  opening  to  him 
the  avenues  to  all  public  honors,  and  which 
sought  to  secure  him,  however  humble  he  might 
be,  such  wages  for  his  work  as  would  enable 
him  to  shelter,  care  for,  and  give  culture  to  his 
family.  The  triumph  of  freedom  over  slavery 
in  this  contest  was  of  inestimable  pecuniary 
value.  But  at  the  beginning  of  the  war  we  were 
unable  to  clothe  our  soldiers  and  sailors  or 
provide  them  with  arms  and  ammunition  of 


5 


our  own  production.  Most  of  the  men  who 
responded  to  President  Lincoln’s  first  requisi¬ 
tion  for  troops,  though  newly  equipped,  were 
in  rags  when  they  reached  the  capital.  Our 
“boys  in  blue,”  after  a  few  days’  exposure 
to  alternate  rain  and  sun,  were  surprised  to 
find  themselves  wearing  red  coats,  and  looking 
rather  like  English  than  American  soldiers. 
The  prospect  of  war  had  flooded  the  country 
with  what  Carlyle  calls  “cheap  and  nasty” 
British  fabrics,  the  warp  and  woof  of  which 
were  shoddy,  and  the  indigo  blue  of  which  had 
been  derived  from  logwood. 

We  had  neither  the  wool  in  which  to  clothe 
them  nor  the  spindles  and  looms  to  fashion  it 
into  cloth.  Nor  were  we  capable  of  producing 
iron  fit  for  gun-barrels  or  cannon;  yet  when  at 
the  close  of  the  war  the  armies  marched  on 
successive  days  through  Pennsylvania  avenue, 
more  than  one  hundred  and  eighty  thousand 
strong,  they  were  clad  as  substantially — I  think 
I  may  say  with  truth  more  comfortably  and  sub¬ 
stantially — thau  had  ever  been  a  great  army 
returning  from  the  fields  of  its  conquest  at 
the  close  a  protracted  war.  They  then 
wore  the  wotI  of  America,  spun  by  American 
spindles  and  woven  in  American  looms;  and  I 
was  assured  about  that  time  by  the  Secretary 
of  War  and  gentlemen  connected  with  the  ord¬ 
nance  department  that  their  choicest  arms  were 
of  native  production,  and  that  we  could  manu¬ 
facture  better  gun-barrel  iron  than  we  could 
import. 

Every  railroad  company  whose  line  runs 
north  and  south  was  then  suffering  depression, 
if  not  in  actual  embarrassment.  Their  condi¬ 
tion  was  not  improving  but  deteriorating,  not¬ 
withstanding  the  fact  that  communities  in  the 
same  latitude  can  and  should  produce  the  same 
commodities,  and  that  the  natural  course  of 
inter-State  and  international  trade  is  across  and 
not  along  parallels  of  latitude.  The  Democratic 
policy  of  stationing  “our  ships  and  workshops 
beyond  the  Atlantic”  contravened  these  natu¬ 
ral  laws,  and  by  compelling  the  people  of  the 
North  and  South  to  make  their  commercial 
exchanges  beyond  the  Atlantic  instead  of  in 
our  own  country  had  deprived  the  roads  from 
north  to  south  of  business  adequate  to  their 
maintenance.  They  were  single-track  roads, 
and  a  number  of  them  had  fallen  into  such 
dangerous  dilapidation  as  to  cause  them  to  be 
regarded  as  “  man-traps”  and  “dead-falls.” 


Yet  such  was  the  healthful  influences  of  active 
business  and  prompt  pay  in  the  irredeemable 
notes  of  a  somewhat  expanded  currency  that 
many  of  them,  while  reducing  or  extinguish¬ 
ing  their  indebtedness,  renewed  and  doubled 
their  tracks  during  the  war,  and  all  of  them 
procured  adequate  motive  power  and  rolling 
stock  for  any  amount  of  business,  public  or 
private,  that  might  offer. 

At  the  beginning  of  the  war  the  iron  of  Lake 
Superior  was  not  an  article  of  commerce,  but  at 
its  close  the  Marquette  region  was  furnishing 
one  eighth  of  the  entire  production  of  the  coun¬ 
try.  In  1801  we  were  dependent  on  foreign  fac¬ 
tories  for  steel;  but  under  the  impulse  of  the 
war  we  are  manufacturing  ordinary  and  Bes¬ 
semer  steel  in  such  quantities  and  of  such 
superior  quality  as  to  justify  the  hope  that  a 
few  years  will  enable  us*  to  compete  in  the 
markets  of  Central  and  South  America  with 
the  nations  on  which  we  have  hitherto  de¬ 
pended.  At  the  beginning  of  the  war  the  great 
western  coal  basin  had  not  been  tested  experi¬ 
mentally.  Intelligent  gentlemen  from  Indiana, 
Illinois,  Missouri,  Iowa,  and  Kansas  spoke  of 
the  wonderful  coal  deposit  which  underlies 
their  respective  States  as  a  matter  of  belief, 
or  theory ;  but  now  every  railroad  through 
those  States  has  either  provided  itself  or  is 
devising  means  to  procure  cars  adapted  to  the 
transportation  of  that  cheap  and  convenient 
fuel.  Brazil,  Indiana,  was  then  an  obscure 
and  inconsiderable  railroad  station,  but  now, 
as  the  center  of  an  iron  and  coal  producing  dis¬ 
trict,  its  population  is  increasing  with  greater 
rapidity  than  any  town  in  the  State,  and  trains 
of  cars  laden  with  coal  leave  it  daily  for  the  iron 
mountain  of  Missouri,  to  supply  the  furnaces 
and  forges  of  that  vicinity  with  fuel,  and  return 
from  the  iron  mountain  to  Brazil  freighted  with 
ore  to  be  smelted  and  wrought  in  the  midst 
of  coal  beds  which  experience  has  proven  to 
be  an  inexhaustible  deposit  of  almost  pure 
carbon.  Active  demand  and  prompt  payment 
in  irredeemable  greenbacks  have  elicited  the 
demonstration  at  both  points  that  in  Indiana 
and  Missouri  are  natural  deposits  that  will,  if 
properly  developed,  before  the  close  of  another 
generation,  dwarf  the  relative  importance  of 
England,  Wales,  or  Belgium  as  coal,  iron,  and 
steel  “producing  centers. 

Thus  did  the  country  respond  to  the  necessi¬ 
ties  of  the  Government,  and  thus  did  the  de- 


6 


mand  for  industry  created  by  the  war  and 
prompt  pay  by  the  Government  for  all  that  it 
bought  from  its  citizens,  in  irredeemable  but 
well-secured  greenbacks  though  it  was,  enable 
the  people  to  respond  promptly  and  amply  to 
its  calls  for  men,  money,  and  materials.  Our 
progress  was  not,  as  already  appears,  confined 
to  the  military  direction,  but  other  branches  of 
industry  were  also  quickened  into  life.  At  the 
beginning  of  the  war  the  West  made  no  zinc  or 
brass  or  clocks  or  watches,  and  she  depended 
on  foreign  nations  for  sugar  and  molasses.  But 
now  the  zinc  of  Illinois  and  the  copper  of  Michi¬ 
gan,  smelted  by  native  fuel,  is  furnishing  the 
West  with  merchant  brass  that  i3  preferred  to 
foreign  by  engravers.  The  town  of  Elgin,  Illi¬ 
nois,  which  rivals  the  most  beautiful  New  Eng¬ 
land  villages,  and  which  produces  watches  equal 
to  the  best  productions  of  any  nation,  has  sprung 
up  since  Sumter  was  fired  on ;  and  in  Austin, 
a  suburb  of  Chicago,  not  yet  three  years  old, 
they  make  clocks,  the  brass,  the  glass,  the  en¬ 
amel,  the  steel,  and  the  frames  of  which,  whether 
simple  or  ornate,  are  all  of  native  production, 
and  into  which  no  particle  of  material  enters 
that  has  ever  been  on  salt  water  or  paid  duty 
at  a  custom-house.  The  inhabitants  of  the 
town  of  Chatsworth,  Illinois,  did  not  number 
two  hundred  at  the  close  of  18G3 ;  they  now 
number  nearly  two  thousand  people,  who  use 
in  their  intercourse  fourteen  of  the  dialects  of 
Europe,  and  are  producing  this  year  nearly  one 
thousand  tons  of  sugar  from  beet  roots,  and  an 
amount  of  molasses  that  will  pay  each  laborer 
good  wages,  and  for  the  coal  consumed  by  the 
wjiole  community;  and  not  only  did  we  prove 
ourselves  able  to  olothe  our  Army  and  improve 
the  material,  texture,  and  durability  of  its  cloth¬ 
ing,  but  we  increased  the  variety  and  improved 
our  woolen  fabrics  for  private  wear  so  much  that 
we  are  able  to  enter  the  list  with  the  most  suc¬ 
cessful  woolen  manufacturing  nations.  But,  sir, 
that  we  did  during  the  war  add  to  our  productive 
power  and  realized  wealth  more  than  the  prin¬ 
cipal  of  our  debt  is  to  my  mind  demonstrated 
by  the  fact  that  though  the  taxes  upon  our 
industry,  trade,  income,  and  the  earnings  of 
our  corporations,  were  heavier  than  now  by 
hundreds  per  cent.,  they  were,  after  the  first 
year  of  the  war,  or  from  the  time  that  green¬ 
backs  relieved  the  want  of  adequate  currency, 
paid  cheerfully,  because  they  were  paid  from 
monthly  or  annual  profits.  Our  people  were 


steadily  increasing  in  wealth,  every  exchange 
of  property  between  them  was  for  mutual  ad¬ 
vantage,  and  by  increasing  their  wealth  added 
to  the  taxable  resources  of  the  country.  The 
able  report  of  the  Special  Commissioner  of  the 
Revenue,  D.  A.  Wells,  Esq.,  thus  corroborates 
this  view: 

“As  has  been  already  shown,  the  national  expendi¬ 
tures,  exclusive  of  appropriations  for  the  redemption 
of  the  public  debt  and  for  interest,  attained  during  the 
five  years  from  1861  to  1866  the  extraordinary  aver¬ 
age  of  over  seven  hundred  and  twelve  million  dol¬ 
lars  per  annum,  to  which  must  also  be  added  the  great  * 
increase  during  the  same  period  of  State  and  local 
expenditures.  Now,  while  by  far  the  largest  portion 
of  the  money  represented  by  this  expenditure  wa3 
borrowed,  it  must  nevertheless  be  borne  in  mind  that 
the  average  annual  money  statement  for  the  year3 
specified  is  in  a  great  degree,  if  not  entirely,  the 
measure  of  the  labor  annually  furnished  to  the  Gov¬ 
ernment  in  the  form  of  commodities  or  services  ren¬ 
dered  in  the  Army  or  Navy,  for  the  war  in  the  main 
was  conducted  by  means  of  the  services  of  the  soldiers 
rendered  at  the  time,  and  by  means  of  the  food,  cloth¬ 
ing,  and  material  of  war  raised  or  made  during  the 
period  of  hostilities,  and  for  which  money  or  an  ac¬ 
knowledgment  of  indebtedness  was  given.  It  there¬ 
fore  appears  that  during  the  years  from  1861  to  1866 
labor  and  commodities  were  continually  withdrawn 
from  the  productive  employments  of  peace  to  the 
destructive  occupations  of  war,  and  that  the  meas¬ 
ure  of  this  unproductive  diversion  was  in  excess  of 
$712,000,000  per  annum,  and  yet  during  the  continu¬ 
ance  of  all  this  drain  the  northern  and  Pacific  States 
did  notcease  to  make  a  real  progress  in  the  creation  of 
substantial  wealth.  Thus  the  aggregate  of  the  north¬ 
ern  crops,  measured  in  bulk  and  quarry,  and  not  in 
money,  did  not  decrease,  but  increas™;  the  area  of 
territory  placed  under  cultivation  was  continually 
enlarged;  railroads  continued  to  be  built,  mines  to 
be  opened,  and  mills,  stores,  and  dwellings  to  be 
erected.” 

As  if  to  emphasize  this  statement,  the  Com¬ 
missioner  adds  the  following  foot  note : 

“  It  is  notbelievedthat  any  great  amount  of  north¬ 
ern  capital  accumulated  prior  to  the  war  was  used  or 
destroyed  during  the  war,  but  that  the  service  and 
commodities  used  were  mainly  tho  product  of  the 
time.” 

Mr.  Chairman,  so  immensely  had  ready 
demand,  the  rapid  circulation  of  commodities^ 
and  prompt  pay  in  greilnbacks  stimulated  our 
industry  that  the  amount  of  American  produc¬ 
tions — agricultural,  mineral,  scientific,  or  me¬ 
chanical — that  had  been  devoted  to  the  work  of 
destruction  are  thus  shown  to  have  been  in 
excess  of  th.e  requirements  for  civil  life  in  a 
season  of  prosperity,  and  certainly  in  increasing 
-excess  of  the  production  of  former  years. 

But,  sir,  the  war  has  ended ;  we  are  again  at 
peace ;  the  jurisdiction  of  the  Government  ex¬ 
tends  over  the  whole  country.  Twelve  million 
of  producers  and  consumers  have  been  brought 
within  our  jurisdictibn  by  the  extinguishment 
of  the  confederate  government,  under  whose 
laws  they  had  lived  and  to  whose  treasury  they 
had  paid  tribute  during  the  war,  and  the  com¬ 
missioner,  in  this  connection,  submits  this  prop- 


osition,  to  which  I  propose,  briefly  as  I  can,  to 
reply.  He  asks: 

“  If  a  portion  of  the  country  could  contribute  of  its 
surplus  labor  and  capital  an  annual  value  of  $21  07 
per  capita  for  destructive  purposes,  will  it  not  bo 
easy  for  the  whole  country,  with  its  labor  and  capital 
restored  to  productive  employments,  to  contribute 
$8  73 per  capftaforthopaymentof  interest,  expenses, 
and  the  reduction  of  the  debt?” 

This  diminished  rate  of  taxation,  the  Com¬ 
missioner  tells  us,  will  not  only  provide  for  an 
annual  expenditure  of  $140,000,000  for  ordi¬ 
nary  expenses,  $130,000,000  for  interest  on  the 
public  debt,  but  $50,000,000  annually  for  the 
reduction  of  the  principal  of  the  debt. 

Mr.  Chairman,  whether  the  people  can  bear 
this  rate  of  taxation,  reduced  as  it  is,  will 
depend  upon  our  legislation.  Had  Congress 
one  year  ago,  when  I  urged  it  to  that  course, 
repealed  the  taxes  that  have  not  only  burdened 
all  but  prostrated  many  of  the  industries  of  the 
country  during  the  past  year,  and  withheld  from 
the  Secretary  of  the  Treasury  the  power  to  con¬ 
tract  the  currency,  I  believe  there  would  be  no 
doubt  on  this  question.  My  views  on  this  point 
are  the  results  of  much  deliberation,  and  have 
undergone  no  recent  change.  Experience  has 
but  made  that  history  which  for  the  two  last 
years  I  have  uttered  to  the  House  as  predic¬ 
tion.  When  addressing  the  House  on  January 
31,  1866,  I  said: 

“  England,  if  supreme  selfishness  be  consistent  with 
sagacity,  has  been  eminently  sagacious  in  preventing 
us  from  becoming  a  manufacturing  people ;  for  with 
our  enterprise,  our  ingenuity,  our  freer  institutions, 
the  extent  of  our  country,  tho  cheapness  of  our  land, 
the  diversity  of  our  resources,  the  grandeur  of  our 
seas,  lakes,  and  rivers,  we  should  long  ago  have  been 
ablo  to  offer  her  best  workmen  such  inducements  as 
would  have  brought  them  by  millions  to  help  bear 
our  burdens  and  fight  our  battles.  We  can  thus  raise 
the  standard  of  British  and  continental  wages  and 
protect  American  workmen  against  ill-paid  compe¬ 
tition.  This  wo  must  do  if  we  mean  to  maintain  the 
national  honor.  The  fields  now  under  culture,  the 
houses  now  existing,  the  mines  now  being  worked, 
the  men  we  now  employ,  cannot  pay  our  debt.  To 
meet  its  annual  interest  by.taxing  our  present  popu¬ 
lation  and  developed  resources  would  be  to  continue 
an  ever-enduring  burden. 

‘‘  The  principal  of  tho  debt  must  be  paid;  but  as 
it  was  contracted  for  posterity  its  extinguishment 
should  not  impoverish  those  who  sustained  the  bur¬ 
dens  of  the  war.  I  am  not  anxious  to  reduce  the 
total  of  our  debt,  and  would,  in  this  respect,  follow 
tho  example  of  England,  and  as  its  amount  has  been 
fixed  would  not  for  tho  present  trouble  myself  about 
its  aggregate,  except  to  prevent  its  increase.  My 
anxiety  is  that  the  taxes  it  involves  shall  be  as  little 
oppressive  as  possible,  and  bo  so  adjusted  that,  while 
defending  our  industry  against  foreign  assault,  they 
may  add  nothing  to  tho  cost  of  those  necessaries  of 
life  which  we  cannot  produce,  and  for  which  wo  must 
therefore  look  to  other  lands.  Tho  raw  materials 
entering  into  our  manufactures,  which  we  are  yet 
uuable  to  produce,  but  on  which  we  unwisely  impose 
duties,  I  would  put  into  the  freo  list  with  tea.  coffee, 
and  other  such  purely  foreign  essentials  of  life,  and 
would  impose  duties  on  commodities  that  compete 
with  American  productions,  so  as  to  protect  every 
fceblo  or  infant  branch  of  industry  and  quicken  those 


that  arc  robust.  I  would  thus  cheapen  tho  elements 
of  lifo  and  enable  those  whoso  capital  is  embarked 
in  any  branch  of  production  to  offer  such  wages  to 
the  skilled  workmen  of  all  lands  as  would  steadily 
and  rapidly  increase  our  numbers,  and,  as  is  always 
the  case  in  the  neighborhood  of  growing  cities  or 
towns  of  considerable  extent,  increase  the  return  for 
farm  labor;  this  policy  would  open  new  mines  and 
quarries,  build  new  furnaces,  forges,  and  factories, 
and  rapidly  increase  the  ta  xable  property  and  inhab¬ 
itants  of  the  country.  "Would  the  south  accept  this 
theory  and  enter  heartily  upon  it3  execution,  -he 
would  pay  more  than  now  seems  her  share  of  the  debt 
and  feel  herself  blessed  in  tho  ability  to  do  it.  Her 
climate  is  more  genial  than  ours;  her  soil  may  be 
restored  to  its  original  fertility ;  her  rivers  are  broad 
and  her  harbors  good;  and,  above  all,  hers  is  the 
monopoly  of  tho  fields  for  rice,  sugar,  and  cotton. 
Let  us  pursue  for  twenty  years  tho  sound  national 
po.licy  of  protection,  and  wo  will  double  our  popula¬ 
tion  and  more  than  quadruple  our  capital,  and  re¬ 
duce  our  indebtedness  per  capita  and  per  acre  to  little 
more  than  a  nominal  sum.  Thus  each  man  can  ‘with¬ 
out  moneys’  pay  the  bulk  of  his  portion  of  the  debt 
by  blessing  others  with  the  ability  to  bear  an  honor¬ 
able  burden.” 

Confirmed  in  the  correctness  of  these  views 
by  subsequent  observation  and  reflection,  at 
the  final  session  of  the  Thirty-Ninth  Congress 
I  introduced  a  resolution  instructing  the  Com¬ 
mittee  of  Ways  and  Means — 

“To  inquire  into  the  expediency  of  immediately 
repealing  the  provisions  of  the  internal  revenue  law 
whereby  a  tax  of  five  per  cent,  is  imposed  on  the 
mechanical  and  manufacturing  industry  of  the  coun¬ 
try.” 

And  on  the  earliest  day  the  rules  would  per¬ 
mit  I  offered  another  resolution  declaring — 

“That  the  proposition  that  tho  war  debt  of  the 
country  should  be  extinguished  by  tho  generation 
that  contracted  it  is  not  sanctioned  by  sound  princi¬ 
ples  of  national  economy  and  does  not  meet  the  ap¬ 
proval  of  this  House.” 

On  the  3d  of  January,  1867,  in  addressing 
the  House  in  opposition  to  the  views  of  the 
Secretary  of  the  Treasury  in  favor  of  the  main¬ 
tenance  of  extraordinary  taxes,  contraction  of 
the  currency,  and  resumption  of  specie  pay¬ 
ments  within  two  years  from  the  date  of  his 
Fort  Wayne  speech,  or  of  his  annual  report, 
and  the  extinguishment  of  not  less  than  $100,- 
000,000  of  the  principal  of  the  debt  annually, 
I  said : 

‘‘Peace  is  restored,  our  currency  approximates  the 
specie  standard,  and  it  is  discovered  that  by  aid  of 
our  inordinate  internal  taxes  foreign  manufacturers 
arc  monopolizing  our  homo  market.  Our  publishers 
buy  their  paper  and  print  and  bind  their  books  in 
England  or  Belgium;  our  umbrella-makers  have 
transferred  their  workshops  to  English  towns;  our 
woolen  and  worsted  mills  are  closed  or  closing,  and 
tho  laborers  in  theso  branches  aro  not  only  wasting 
their  capital,  which  consists  in  their  skill  and  indus¬ 
try,  but  drawing  from  tho  savings  banks  or  selling 
tho  Government  bonds  in  which  they  had  invested 
their  small  accumulations  to  maintain  their  families 
during  the  winter;  and  our  enlarged  importations 
of  foreign  goods  aro  swelling  the  balance  of  trado 
against  us  and  preparing  us  for  goucral  bankruptcy.” 

And  again : 

“Tho  experiment,  if  attempted  as  a  means  of  has- 
i  tening  specie  payments,  will  provo  a  failure,  but  not 
1  a  harmless  one.  It  will  bo  fatal  to  tho  prospects  of 


8 


a  majority  of  the  business  men  of  this  generation 
and  strip  the  frugal  laboring  people  of  the  country 
of  the  small  but  hard-earned  sums  they  have  depos¬ 
ited  in  savings  banks  or  invested  in  Government 
securities.  It  will  make  money  scarce  and  employ¬ 
ment  uncertain.  Its  object  is  to  reduce  the  amount 
of  that  which  in  every  part  of  our  country  and  for 
the  hundreds  of  thousands  of  millions  of  dollars  of 
domestic  trade  is  money  and  to  increase  its  pur¬ 
chasing  power;  and  by  unsettling  values  it  will 
paralyze  trade,  suspend  production,  and  deprive 
industry  of  employment.  It  will  make  the  money 
of  the  rich  man  more  valuable  and  deprive  the  poor 
man  of  his  entire  capital,  the  value  of  his  labor,  by 
depriving  him  of  employment.  Its  first  effect  will 
be  to  increase  the  rate  of  interest  arid  diminish  the 
rate  of  wages,  and  its  final  effect  wide-spread  bank¬ 
ruptcy  and  a  more  protracted  suspension  of  specie 
payments.” 

Sir,  these  predictions  were  not  only  not 
heeded  but  were  denounced  as  the  vagaries 
of  a  mere  theorist  by  gentlemen  whose  position 
made  their  voices  potential ;  and  I  remember 
that  when  the  productions  of  the  hand-loom 
weavers  of  the  country  had  been  freed  from 
taxation  by  the  votes  of  both  Houses  the  com¬ 
mittee  of  conference  upon  the  disagreeing  votes 
of  the  two  Houses  on  the  tax  bill,  seizing  the 
fact  that  the  Senate  and  House  had  differed  as 
to  the  use  of  a  verb,  restored  the  provision 
providing  for  the  tax,  and  the  chairman  of  the 
committee  in  each  House  proclaimed  the  pos¬ 
sibility  of  the  exemption  of  these  compara¬ 
tively  unimportant  productions  producing  a 
deficit  in  the  revenue.  Some  reduction  in  the 
scale  of  taxation  was  made  by  the  bill  to  which 
I  refer,  and  it  is  well  for  the  country  that  it 
was.  Large  as  it  was,  it  would  have  been  bet¬ 
ter  had  every  direct  tax  upon  our  industry  been 
removed.  Nor  would  the  revenue  of  the  Gov¬ 
ernment  have  suffered  from  the  change,  for  we 
collected  during  the  year  18G6-G7  $143,904,880 
more  than  was  required  for  payment  of  inter¬ 
est  on  the  public  debt  and  current  expenses. 
These  iuordinate  exactions  determined  the  line 
between  profit  and  loss  on  many  branches  of 
industry  and  diminished  our  production  by  para¬ 
lyzing  or  suppressing  such  branches.  Without 
the  $G7,778,082  70,  the  amount  derived  from 
direct  taxes  on  manufactures  other  than  spir¬ 
its,  malt  liquors,  and  tobacco  in  its  various 
forms,  we  would  have  been  able  to  extinguish 
more  than  seventy-five  million  dollars  of  the 
principal  of  the  debt. 

Permit  me  to  say,  if  I  may  use  a  homely 
figure,  that  we  lighted  our  candle  at  both  ends 
by  attempting  to  collect  such  heavy  taxes  while 
contracting  the  currency.  The  loom  and  the 
spindle,  no  longer  able  to  yield  profit  to  their 
proprietor,  stand  idle;  the  fires  are  extinguished  1 


in  forge  and  furnace,  and  the  rolling-mill  does 
not  send  forth  its  hum  of  cheerful  and  profitable 
industry.  On  one  day  of  last  month  eighteen 
hundred  operatives  in  the  glass  factories  of 
Pittsburg  were  deprived  of  the  poor  privilege 
of  earning  wages  by  honest  toil  at  the  trade  in 
which  they  were  skilled.  The  establishments 
in  which  they  worked  are  closed.  In  the  ab¬ 
sence  of  productive  employment  for  men  or 
machinery  the  small  holders  of  bonds  are  sell¬ 
ing  them  to  save  themselves  from  bankruptcy 
if  they  are  the  proprietors  of  establishments, 
or  to  feed  themselves  and  families  in  involun¬ 
tary  idleness  if  they  were  laborers  whose  hard- 
earned  savings  had  been  loaned  to  the  Govern¬ 
ment  in  its  exigency.  Look  where  we  may,  to 
any  section  of  the  country,  we  hear  of  u  shrink¬ 
age”  in  the  value  of  manufactured  goods,  of 
reduction  of  wages,  or  of  the  hours  of  labor,  of 
factories  running  on  part  time,  or  closed  or  to 
be  closed.  I  present  no  jaundiced  or  partisan 
view  of  the  case,  for  the  gentleman  who  sub¬ 
mitted  to  this  House  the  report  of  the  commit¬ 
tee  of  conference  to  which  I  have  alluded,  and 
who  resisted  proposed  reductions  of  taxes  m  ith 
such  persuasive  ability,  [Mr.  Morrill,  of  Ver¬ 
mont,]  in  a  recent  discussion  in  the  Senate  on 
the  repeal  of  the  cotton  tax,  said  ; 

‘‘It  may  bo  said  that  the  South  are  clamoring  fbr 
the  repeal  of  the  tax  on  cotton.  Is  there  any  less 
clamor  in  the  West  or  the  North  or  the  East  for  a 
repeal  of  taxation?  I  deny  it.  I  say  there  is  as 
much  urgency  for  a  relief  from  taxation  in  the 
North,  the  East,  and  the  West  as  in  the  South. 
Look  at  the  industries  that  are  at  the  present  mo¬ 
ment  unusually  depressed.  Take,  for  instance,  the 
entire  woolen  interest.  There  is  not  an  establish¬ 
ment  that  is  not  losing  money  to-day.  Take  the 
wool-grower;  not  a  pound  of  wool  raised  last  year 
that  will  bring  within  ten  cents  per  pound  of  its 
cost.  Take  the  cotton  interest;  the  whole  circle  of 
manufactures  are  in  no  better  circumstances.  Look 
at  the  value  of  their  stocks:  for  instance,  take  the  Bates 
manufacturing  stock  of  Maine,  worth  two  years  ago 
one  hundred  and  sixty  cents  on  the  dollar,  now  there 
are  more  sellers  than  buyers  at  one  hundred.  Take 
the  Lyman  mills  on  the  Connecticut,  worth  two  years 
ago  ninety-eight  to  one  hundred,  now  selling  at  sixty- 
nine  orless;  and  so  I  might  go  on  almost  through  the 
whole  list.  They  all  suffer.  Take  the  West — Ohio, 
Illinois,  or  Iowa— look  at  their  hog  crop.  Why,  if 
they  had  given  away  all  their  hogs,  or  if  they  had 
slaughtered  them  a  year  ago  andthrown  them  away, 
they  would  have  been  better  off  to-day.  They  have 
absolutely  lost  their  hog  crop  by  feeding  out  grain  to 
them,  which  unfed  would  have  brought  more  than 
all  their  pork.” 

Mr.  Chairman,  accepting  the  business  of 
the  oldest  and  best- managed  savings  bank  for 
the  receipt  of  small  deposits  in  Philadelphia 
as  a  good  index  to  the  condition  of  the  labor¬ 
ing  class  of  the  country,  I  have  obtained  a 
statement  of  the  number  and  amount  of  drafts 
made  by  the  depositors  whose  whole  deposit 


is  under  one  hundred  dollars,  and  of  the  whole 
number  of  drafts  of  depositors  for  the  month 
of  December  of  the  years  1865,  1866,  and  1867 , 
and  the  total  amount  drawn  in  each  year.  It 
is  as  follows: 


Months. 

Year. 

Under 

8100. 

Whole 
number  of 
payments. 

Amount. 

Dec . 

1365 

846 

1,186 

99,603  10 

Doc . 

1SG6 

811 

1,174 

104,430  95 

Doc . 

1867 

1,128 

1,596 

144,205  70 

To  gentlemen  used  to  large  business  trans¬ 
actions  the  movement  of  the  small  sums  enu¬ 
merated  in  this  exhibit  may  not  seem  import¬ 
ant,  but  they  tell  a  story  of  bankruptcy  as 
grievous  to  the  victim  whose  hours  of  toil  were 
solaced  by  the  reflection  that  he  was  by  his 
small  deposits  garnering  a  trifling  capital  for 
his  children  or  a  shelter  for  his  age  as  is  one 
which  is  telegraphed  to  the  press  of  every  sec¬ 
tion  of  the  country  by  reason  of  the  large 
amount  involved.  Nay,  more  than  that,  these 
drafts  upon  the  small  accumulations  of  years 
of  toil  tell  a  story  of  practical  agrarianism  and 
confiscation  that  would  shock  gentlemen  if 
it  applied  to  the  bonds  or  land  of  the  wealthy. 
The  attempt  to  force  a  resumption  of  specie 
payments  by  contracting  a  volume  of  currency 
which  was  actively,  legitimately,  and  profitably 
employed  is  as  dishonest  as  it  is  unwise.  The 
object  and  effect  of  such  a  movement  is  to 
increase  the  purchasing  power,  the  value  of 
the  rich  man’s  hoarded  or  invested  dollars, 
and  its  projectors  pause  not,  though  they  dis¬ 
cover  that  it  robs  millions  of  laborers  of  their 
whole  estate.  The  laborer’s  income  is  derived 
from  the  exercise  of  his  thews  and  sinews  and 
the  skill  of  his  cunning  right  hand.  These  are  his 
estate — these  and  his  little  savings — and  of  these 
millions  are  being  robbed  by  the  mad  attempt 
of  the  Secretary  of  the  ^Treasury  to  bring  about 
specie  payments  while  the  balance  of  trade  is 
heavily  against  us  and  our  gold-bearing  bonds 
are  so  largely  held  by  foreigners  that  resump¬ 
tion  would  in  less  than  thirty  days  induce  the 
return  of  bonds  enough  to  drain  us  of  specie 
and  make  us  feel  the  curse  of  absenteeism  as 
distinctly  as  Ireland  ever  felt  it.  Were  our 
bonds  held  at  home,  or  were  commercial 
exchanges  greatly  in  our  favor,  we  might  main¬ 
tain  a  forced  resumption  ;  but  with  our  bonds 


abroad,  and  the  balance  of  trade  heavily  against 
us,  we  could  not  maintain  it  a  month.  And  if 
Congress  does  not  restrain  Mr.  McCulloch  from 
persisting  in  the  attempt  he  will  unsettle  the 
value  of  every  species  of  property,  curtail  the 
productive  power  of  the  country,  bankrupt  men 
of  enterprise,  and  rob  millions  of  laboring  peo¬ 
ple  of  their  tvhole  estate. 

But  permit  me  to  inquire  what  effect  this 
experiment  will  have  on  the  public  revenues? 
Can  an  honest  bankrupt  contribute  much  to 
the  exchequer  of  his  country?  Are  those  who 
are  conducting  business  at  a  loss  apt  to  make 
large  contributions  to  the  fund  derived  from 
income  tax?  And  are  unemployed  laborers 
who  have  drawn  and  consumed  their  last  dol¬ 
lar  in  a  condition  to  buy  dutiable  or  taxable 
commodities?  No,  sir;  as  the  number  in  each 
of  these  classes  increases  the  public  revenue 
diminishes;  and  in  view  of  the  facts  I  have 
hastily  presented  I  am  prepared  to  say  that  with 
full  employment,  even  though  prices  had  con¬ 
tinued  as  high  as  they  were  during  the  war,  which 
I  maintain  was  impossible  under  the  influence 
of  our  increasing  activity  and  productive  power, 
the  people  could  better  pay  the  taxes  they  then 
endured  heavy  as  they  were,  than  they  can 
with  a  contracting  currency,  low  prices,  and 
but  partial  or  no  employment  for  men  and 
machinery,  pay  the  greatly  diminished  rate 
suggested  by  the  commissioner. 

Mr.  Chairman,  two  policies  were  open  to  us 
at  the  close  of  the  war.  We  have  tried  one, 
and  the  results  are  but  too  painfully  apparent ; 
the  other  is  still  open  to  us.  It  is  true  we  can¬ 
not  repair  the  losses  already  endured,  but  we 
can  check  the  downward  tendency,  quicken 
industry,  and  give  a  new  impulse  to  the  pro¬ 
ductive  power  of  the  country.  It  was  open  to 
us  to  diminish  the  depreciation  in  the  rate  of 
wages  by  diminishing  taxes  and  furnishing,  as 
we  had  done  during  the  war,  a  sound  circulat¬ 
ing  medium  adequate  in  volume  for  the  rapid 
exchange  of  commodities  among  our  own  'peo¬ 
ple,  and  thus  secure  employment  to  our  labor¬ 
ers  with  fair  wages  for  their  work  ;  or,  on  the 
other  hand,  we  could  by  imposing  taxes  not 
demanded  bv  our  exigencies  and  contracting 
the  currency  impair  confidence,  force  sales, 
palsy  enterprise,  reduce  wages,  and  deprive 
the  laborer  of  a  market  for  the  only  commod¬ 
ity  he  has  to  sell — his  industry. 

Gentlemen  will  say  there  can  for  the  present 


10 


bo  no  employment  because  the  markets  are 
overstocked,  and  there  is  what  political  econo¬ 
mists  often  speak  of,  “a  glut  in  the  market.” 
Sir,  the  time  has  never  been  when  the  markets 
of  the  world  were  glutted.  When  that  event 
shall  come,  every  home  will  be  well  furnished 
and  every  human  being  well  clothed.  A 
superabundance  of  the  necessaries  of  life  can 
not  exist  while  the  urgent  wants  of  millions 
cannot  be  supplied.  Our  markets  are  not 
glutted.  The  stock  of  goods  of  every  kind  in 
the  hands  of  merchants  is  unusually  low,  and 
there  are  unemployed  people  in  the  country 
who  need  them  all  and  who  would  gladly  labor 
for  the  means  to  purchase  them  all.  The 
wretch  that  shivers  in  a  cheerless  home  with¬ 
out  food,  fuel,  or  adequate  clothing  5  she  who, 
ill-fed  herself,  shares  her  last  crust  with  her 
hungry  children;  and  they  who  in  the  midst 
of  winter  are  deprived  of  the  privilege  of  toil¬ 
ing,  and  as  their  goods  are  thrown  rudely  into 
the  street  realize  a  landlord’s  power  when  rent 
is  in  arrear,  do  not  believe  that  the  market  is 
glutted.  Nor  is  it.  The  disease  from  which 
we  suffer  is  not  glut  or  plethora.  Its  seat  is  in 
the  functions  of  circulation.  It  is  congestion 
produced  by  a  financial  tourniquet  applied  by  a 
charlatan.  That  phrase  “  glut  in  the  market  ’  ’ 
involves  a  perversion  of  terms  and  is  used  to 
express  the  fact  that  the  masses  are  from  some 
cause  unable  to  consume  their  usual  supply  of 
the  comforts  or  necessaries  of  life.  It  does 
not,  as  it  implies,  express  the  fact  that  there  is 
an  over  supply  of  commodities  essential  to  the 
comfort  of  man,  but  that  there  is  financial 
derangement.  It  is  a  convenient  phrase  for 
the  theorist,  a  veil  used  to  conceal  a  fact  the 
occurrence  of  which  should  admonish  every 
statesman  that  there  is  something  wrong  in  the 
prevailing  practice  of  government. 

The  author  of  the  next  treatise  on  popular 
fallacies  should  make  “glut  in  the  market” 
the  subject  of  a  leading  chapter;  for  they  who 
use  the  phrase  invariably  confound  terms  and 
designate  the  consequence  as  the  cause.  Thus 
the  Irish  Republic,  in  the  course  of  a  very  able 
article  in  its  issue  of  January  4,  says : 

“From  all  parts  of  Massachusetts  and  Connecticut 
we  have  been  receiving,  during  the  past  six  weeks, 
the  very  unwelcome  intelligence  that  mill  owners 
and  manufacturers  were  either  contracting  their  pro¬ 
ducing  operations  or  suspending  them  altogether. 
Running  half  or  quarter  time  appears  to  be  the  order 
of  the  day;  while  not  unfrequently  the  engine  fires 
arc  blown  out  and  the  machinery  left  to  rust  in  idle¬ 
ness.  The  cause  is  obvious.  There  is  little  or  no 


demand  for  goods.  The  consequences  are  what  we 
have  already  stated.  The  hands  of  hundreds  of  thou¬ 
sands  of  honest  workmen  are  idle,  and  their  children 
are  ill-fed  and  ill-clad  under  the  biting  blasts  of  a 
North  American  winter.” 

Let  me  point  out  the  fallacy  of  this  state¬ 
ment.  Fires  are  blown  out  and  machinery 
left  to  rust  in  idleness,  not  because  there  is  no 
demand  for  goods,  but  because  throughout  the 
South  and  West  there  is  no  circulating  medium 
with  which  to  effect  exchanges ;  and  the  policy 
of  the  Secretary  of  the  Treasury  with  the  cry 
of  the  creditor  class  for  resumption  have  de¬ 
stroyed  confidence  in  individual  credit.  The 
proposition  should  be  stated  thus : 

“There  is  little  or  no  demand  for  goods.  The  cause 
is  obvious:  it  is  that  the  hands  of  hundreds  of  thou¬ 
sands  of  honest  workmen  are  idle,  and  their  children 
ill-fed  and  ill-clad,  because  mill  owners  and  manu¬ 
facturers  have  been  compelled  to  contract  their 
operations  and  withhold  from  laborers  employment 
and  wages  with  which  they  would  be  able  to  pur¬ 
chase  the  products  of  the  farmer  and  manufacturer.” 

The  general  theory  I  am  advancing  is  not  new, 
and  is  one  that  should  never  be  disregarded  by 
those  who  legislate  for  the  people  of  a  republic. 
The  social  evils  we  are  enduring,  the  bankruptcy 
that  is  overtaking  so  many  men  of  enterprise, 
the  want  and  enforced  idleness  that  prevails  so 
largely  among  our  laboring  classes  are  due  to 
two  causes: — excessive  internal  taxation  and 
the  curtailment  of  our  currency  at  a  time  when 
the  numbers  and  activities  of  our  people  were 
rapidly  increasing.  The  Secretary  of  the  Treas¬ 
ury  and  his  adherents  are  responsible  for  this 
general  prostration  of  credit  and  business. 
They  talk  of  the  honor  of  the  country,  and  the 
necessity  of  maintaining  it  by  making  the  paper 
dollar  equal  to  the  gold  dollar,  and  of  hasten¬ 
ing  the  day  when  our  bonds  shall  be  paid  in  gold. 
The  means  to  which  they  resort  will  not  pro¬ 
duce  the  results  they  desire,  but  will  defeat 
them.  Nor  are  those  who  resist  them  hostile 
to  the  bondholder.  They  aim  to  secure  the 
laborer  the  possession  and  just  fruits  of  his 
hard  inheritance,  and  by  the  rapid  development 
of  the  boundless  resources  of  the  country  and 
the  restoration  of  general  prosperity  to  enable 
the  Government  to  meet  the  utmost  of  its  obli¬ 
gations  with  honor  at  maturity.  The  contest 
is  between  the  creditor  and  the  debtor  class — 
the  men  of  investments  and  the  men  of  enter¬ 
prise  ;  and  during  all  such  contests  the  laboring 
classes  are  inevitable  sufferers. 

The  issue  thus  raised  is  as  old  as  civilization. 
And  now,  as  always  heretofore,  the  creditor 
class  is  the  aggressor.  Alison,  in  his  history 


11 


of  Europe  from  the  fall  of  Napoleon  to  the 

accession  of  his  nephew,  says  : 

“  Whoever  has  studied  with  attention  the  structure 
or  tendencies  of  society,  either  as  they  ate  portrayed 
in  the  annals  of  ancient  story  or  exist  in  the  com¬ 
plicated  relations  of  men  around  us,  must  have  be¬ 
come  aware  that  tho  greatest  evils  which  in  the  later 
stages  of  national  progress  come  to  alllict  mankind, 
arose  from  the  undue  influence  and  paramount 
importance  of  realized  riches.  That  tho  rich  in 
the  later  stages  of  national  progress  are  constantly 
getting  richer  and  tho  poor  poorer  is  a  common 
observation,  which  has  been  repeated  in  every 
age,  from  the  days  of  Solon  to  those  of  Sir  Robert 
Peel;  and  many  of  the  greatest  changes  which  have 
occurred  in  the  world — in  particular  the  fall  of  the 
Roman  empire— may  be  distinctly  traced  to  the  long- 
continued  operation  of  this  pernicious  tendency.” 

*  *  *  ‘‘ For  tho  evils  complained  of  arose  from 

the  unavoidable  result  of  a  stationary  currency, 
coexisting  with  a  rapid  increase  in  tho  numbers 
and  transactions  of  mankind;  and  these  were  only 
aggravated  by  every  addition  made  to  the  energies 
and  productive  powers  of  society.” 

Again,  ho  says: 

‘‘But  if  an  increase  in  the  numbers  and  industry 
of  man  coexists  with  a  diminution  in  the  circulating 
medium  by  which  their  transactions  arc  carried  on, 
the  most  serious  evils  await  society,  and  the  whole 
relations  of  its  different  classes  to  each  other  will  be 
speedily  changed;  and  it  is  in  that  state  of  things 
that  the  saying  proves  true  that  the  rich  aro  every 
day  growing  richer  and  the  poor  poorer.” — Alison’s 
History  of  Europe ,  1815  to  1852,  chapter  1. 

As  Sir  Archibald  Alison  was  not  gifted  with 
more  than  human  prescience  he  could  not 
have  forseen  the  condition  of  our  country  in 
the  years  that  are  passing.  If,  therefore,  he 
described  it,  he  did  so  by  declaring  a  general 
law.  That  he  did  portray  our  condition  with 
nice  discrimination  no  one  can  controvert. 
Let  us  see  how  exact  a  compliance  the  con¬ 
traction  policy  is  producing  with  all  the  condi¬ 
tions  the  conjunction  of  which  he  tells  us  must 
produce  the  most  serious  evils  to  society. 

The  close  of  tho  war  found  us  with  a  cur- 
iglicy  expanded  somewhat  beyond  the  amount 
to  which  we  had  been  used  before  the  rebel¬ 
lion,  but  wifli  everybody  in  fhe  North  well 
employed.  Men  of  character  were  able  to 
borrow  money  at  moderate  rates  of  interest, 
and  were  everywhere  engaging  in  new  enter¬ 
prises  that  were  not  merely  speculative,  but 
calculated  to  add  to  individual  and  national 
wealth.  Labor  was  in  demand  at  fair  wages. 
It  is  true  that  food  was  high,  for  a  great  war 
had  raged  through  a  series  of  years,  and  been 
succeeded  by  years  of  drought  or  excessive 
rain,  during  which  the  fields  had  not  yielded 
their  usual  crops.  This  no  legislation  could 
have  averted ;  but  in  spite  of  it  tho  people  at 
large  were  prosperous  and  confident  that  a 
fruitful  year  would  adjust  the  cost  of  food  to 
the  prices  of  other  commodities.  From  ten  to 


twelve  millions  of  our  people,  occupying  more 
than  six  hundred  thousand  square  miles  of  our 
most  fertile  territory,  which  abounded  in  water 
power  and  varied  mineral  resources,  were 
almost  without  currency.  Their  whole  capi¬ 
tal,  other  than  lands  and  houses,  railroads 
and  canals,  had  been  invested  in  confederate 
loans  or  otherwise  exhausted.  Their  banks 
and  insurance  companies  were  bankrupt.  They 
had  cotton,  tobacco,  naval  stores,  and  the 
fields  from  which  to  produce  them  and  all 
other  agricultural  commodities.  They  had 
laborers  skilled  in  their  arts  of  cultivation, 
and  willing  to  toil  for  wages  unreasonably  low, 
but  they  had  no  currency,  no  circulating  me¬ 
dium  with  which  to  make  commercial  or  other 
exchanges  of  property  or  to  pay  their  laborers. 

At  the  same  time  an  unusual  stream  of  emi¬ 
gration  was  flowing  to  us,  from  transatlantic 
countries.  Enterprise  was  pushing  rapidly 
westward,  and  towns  and  cities  were  rising 
where  the  buffalo  had  roamed  over  unbroken 
prairies  when  the  war  began.  With  these  ad¬ 
ditions  to  our  population  and  to  the  area  over 
which  it  was  to  circulate  what  was  there  to 
indicate  the  propriety  of  a  curtailment  of  the 
medium  by  which  transactions  between  man 
and  man  and  community  and  community  were 
to  be  carried  on?  For  myself  I  was  unable  to 
see  any,  and  protested  against  the  mad  theories 
of  the  Secretary  of  the  Treasury  and  his  disci¬ 
ples.  In  the  course  of  my  remarks  on  the  3d 
of  January,  1867,  to  which  I  have  alluded,  I 
said: 

“Neither  tho  Secretary  of  the  Treasury  nor  Con¬ 
gress  know  whether  our  currency  is  in  excess  of  tho 
amount  required  by  legitimate  and  healthful  tradff; 
or  if  it  be,  how  long  it  will  remain  so  if  undisturbed 
by  legislation.  Nor  can  we  settle  these  points  by  an 
appeal  to  experience,  for  many  of  our  conditions  are 
novel.  That  would  be  a  curious  and  instructive  cal¬ 
culation  which  would  show  the  country  the  precise 
demand  for  currency  created  by  the  operation  of  the 
Bureau  of  Internal  Revenue,  or  by  tho  enlargement 
of  the  Army  and  Navy  and  clerical  force  of  the  Gov¬ 
ernment. 

“  Under  tho  discipline  of  Providence  tho  southern 
people  will,  before  many  years  glide  away,  consent 
to  permit  their  fields  to  bo  tilled,  their  mints  to  bo 
worked,  and  their  cities  to  bo  rebuilt  and  expanded ; 
and  who  can  tell  tho  amount  of  currency  that  will 
then  be  required  by  the  four  million  enfranchised 
slaves  and  tho  two  million  poor  whites,  who  did  not 
in  tho  past,  but  arc  hencelorth  to  earn  wages  and 
buy  and  sell  commodities,  or  for  handling  the  crops 
and  mineral  productions  of  tho  South?  Since  we 
last  adjourned  tho  iron  horse  has  Crossed  Nebraska 
on  one  of  the  routes  to  the  Pacific,  and  his  snort  has 
been  heard  in  tho  neighborhood  of  Fort  Riley  on 
another;  and  during  the  last  year  threo  hundred 
thousand  industrious  people,  who  had  been  fed  and 
clothed  through  unproductive  chi  hi  hood  at  tho  cost  of 
other  nations,  came  and  cast  their  lot  among  us  to  till 
our  fields,  smelt  our  ores,  work  our  metals,  and  man¬ 
age  our  spindles  uud  looms;  and  I  cannot  guess  what 


12 


amount  of  currency  these  energetic  people  and  the 
westward-marching  column  of  our  civilization  will 
require.  But,  sir,  of  one  thing  I  am  certain,  and  it  is 
that  had  the  Secretary  of  the  Treasury  not  destroyed 
all  sense  of  security  in  the  future,  the  demand  for 
currency  to  purchase,  especially  in  the  South,  mineral 
and  other  lands,  and  develop  their  productive  power, 
would  have  prevented  the  accumulation  of  the 
immense  deposits  which  now  lie  paralyzed  in  bank 
or  are  loaned  on  call  to  speculators  in  the  necessaries 
of  life.  We  unsettled  values  and  made  or  scattered 
fortunes  by  the  rapid  expansion  of  the  currency; 
and  the  people  implore  us  to  avoid  another  violent 
change  fraught  with  like  consequences,  and  to  stay 
the  work  of  contraction  till  we  shall  have  ascertained, 
at  least  proximately,  the  amount  of  currency  required 
by  healthy  and  legitimate  trade.” 

But,  Mr.  Chairman,  gentlemen  ask,  do  you 
not  wish  to  return  to  specie  payments?  I 
answer,  yes ;  but  not  by  the  way  of  bank¬ 
ruptcy  and  repudiation ;  and  that  way  leads 
contraction  in  the  midst  of  an  increase  such 
as  never  existed  before  in  the  numbers  of  men 
and  fields  for  their  activity.  Return  to  specie 
payments  !  Are  we  doing  it?  No,  sir.  The 
difference  between  the  greenback  and  gold 
dollar  widens  with  each  month.  And  while  a 
greenback  dollar  will  buy  less  gold  it  will  pur¬ 
chase  much  more  of  any  other  commodity  than 
it  would  a  year  ago.  The  rate  of  interest 
demanded  for  loans  in  the  West  and  South  is 
so  inordinate  that  it  has  suspended  enterprise 
and  must  exhaust  the  resources  of  any  man 
who  attempts  to  pay  it ;  and  while  the  labor¬ 
ing  people  are  idle  the  capital  which  should 
furnish  them  employment  may  be  borrowed 
from  the  banks  of  Boston  or  New  York,  in 
whose  vaults  the  bulk  of  our  currency  has 
accumulated,  by  those  who  have  gold  or  United 
States  bonds  to  offer  as  security,  at  four  per 
cent,  per  annum.  Contraction  has  destroyed 
confidence.  The  possessors  of  “  realized 
riches”  have  no  faith  in  spindles  and  looms 
that  are  producing  goods  for  a  falling  market, 
or  forges  and  furnaces  the  productions  of 
which  must  be  sold  at  a  loss,  and  invest  their 
funds  in  Government  bonds,  or  let  them  lie  on 
deposit  till  they  can  buy,  at  a  small  percentage 
of  their  value,  mills,  factories,  mines,  and 
other  valuable  properties,  when  bankruptc}7 
shall  cause  them  to  be  exposed  at  public  or 
judicial  sale.  Sir,  we  are  not  on  the  road  to 
resumption,  and  will  not  be  till  we  restore 
confidence  and  quicken  industry  by  repealing 
needless  taxes  which  are  giving  foreign  manu¬ 
facturers  an  advantage  in  our  market,  and  de¬ 
prive  the  Secretary  of  the  Treasury  of  his  power 
to  contract  the  currency  and  tamper  with  the 
market  value  of  every  species  of  property  by 


secret  operations  in  gold  and  the  credit  of  the 
country. 

.  Mr.  Chairman,  the  Secretary  and  his  adher¬ 
ents  will  assume  to  find  a  response  to  the  sug¬ 
gestions  I  have  made  iu  the  facts  set  forth  by 
the  Special  Commissioner  of  Revenue  in  his 
able  and  valuable  report  that  the  income  of  the 
country  from  either  internal  revenue  and  cus¬ 
toms  has  not  fallen  off  during  the  last  two 
years.  The  Commissioner’s  statements  are 
indisputable,  and  I  thank  him  for  the  industry, 
patience,  and  care  he  has  exhibited  in  procur¬ 
ing  and  digesting  the  materials  for  his  report. 
But,  sir,  there  is  a  fact  that  deprives  this  re¬ 
sponse  of  anything  like  conclusive  power.  It 
is  not  alluded  to  by  Mr.  Wells,  because  itlouched 
no  poiut  he  assumed  to  discuss.  Let  me  state 
it.  The  revenues  of  the  country  from  1860  to 
1865  were  derived  from  the  loyal  States.  Dur¬ 
ing  that  time  the  confederate  States  did  not 
contribute  to  our  public  revenue,  and  Maryland, 
Kentuckjq  Tennessee,  and  Missouri  were  rav¬ 
aged  by  war.  To  find  a  reply  to  my  argument 
in  the  Commissioner’s  report  it  should  show 
not  only  that  our  revenues  during  the  last  fiscal 
year  have  exceeded  those  of  1864  and  1865  in 
the  ratio  of  our  ordinary  growth  and  progress, 
but  also  how  largely  the  ten  States  now  being 
reconstructed,  with  Missouri,  Tennessee,  Ken¬ 
tucky,  and  Maryland,  when  freed  from  the 
tramp  of  war,  were  able  to  contribute  to  the 
resources  of  the  country.  To  this  fact  the  Com¬ 
missioner  does  not  allude.  No,  sir;  it  requires 
the  contributions  made  by  the  people  of  the 
insurgent  and  border  slave  States  during  the 
last  fiscal  year  to  furnish  the  Commissioner 
with  the  gratifying  figures  he  presents  to  the 
country  and  its  creditors.  A  fair  statement  of 
the  account  would  contain  the  amount  received 
from  the  southern  States  as  a  credit  and  be 
debited  with  the  amount  lost  by  the  paralysis 
of  industry  and  the  productive  power  of  the 
North.  Were  the  account  thus  stated  it  would 
be  apparent  to  all  that,  notwithstanding  the 
addition  of  fifty  per  cent,  to  the  taxable  popu¬ 
lation,  the  current  revenue  derived  by  the  Gov¬ 
ernment  was  not  increased,  but  simply  steadily 
maintained. 

Gentlemen  may  say  that  the  South  has  yielded 
but  little  internal  revenue  besides  that  derived 
from  the  cotton  tax,  and  I  freely  admit  that  she 
has  not  contributed  so  largely  as  we  might  well 
have  hoped;  but  I  affirm  that  her  contributions 


4 


13 


would  have  been  much  greater  had  our  policy 
been  wiser.  It  has  affected  that  section  of  the 
country  more  potently  for  evil  than  it  has  the 
North.  Our  society  was  not  disorganized  and 
our  industrial  force  was  admirably  arranged 
and  producing  its  best  results,  yet  we  are  suf¬ 
fering  derangement  and  paralysis.  Wide  sec¬ 
tions  of  the  South  had  been  ravaged  by  war, 
and,  as  I  have  already  said,  its  financial  institu¬ 
tions  and  the  accumulated  capital  of  its  citizens 
not  invested  in  lands  and  buildings  had  been 
absorbed  by  the  confederate  loan  or  consumed 
in  the  war;  but  by  judicious  treatment  its  recu¬ 
peration  should  have  been  so  rapid  as  to  have 
been  the  marvel  of  the  world.  That  the  natural 
resources  of  the  South  are  greater  than  those 
of  the  North  is  undeniable.  She  is  capable  of 
producing  every  agricultural  product  that  can 
be  grown  in  our  climate.  Her  mineral  resources 
are  greater  and  more  varied  than  ours;  she  lies 
near  the  sea  and  abounds  in  navigable  rivers, 
affording  cheap  water  transportation  to  sea¬ 
ports  for  the  greater  portion  of  her  productions, 
and  to  her  belongs  the  monopoly  of  the  pro¬ 
duction  of  cotton,  fine  tobacco,  rice,  and  naval 
stores,  and,  until  now  that  we  are  availing  our¬ 
selves  of  the  beet,  of  the  sugar  fields  of  the 
country  also.  Immense  bodies  of  land,  as  fertile 
as  any  in  the  country,  and  which  has  never 
felt  the  pressure  of  the  plowshare,  are  to  be 
found  in  every  southern  State.  Louisiana  alone 
has  sixty  thousand  such  acres  which  will  yield 
cotton  or  sugar,  wheat  or  corn.  Marvelous  as 
was  the  increase,  of  the  productive  power  of  the 
loyal  States  during  the  war,  that  of  the  southern 
States  almost  equaled  it.  Gentlemen  will  not 
forget  that  her  Merrimac  had  sunk  the  Cum¬ 
berland  before  our  first  monitor  was  ready  to 
measure  power  with  her.  Great  Britain  sup¬ 
plied  her  with  much  of  her  munitions  of  war, 
but  the  unmechanical  South  overwhelmed  us 
with  surprise  by  the  large  share  of  these  she 
produced  for  herself.  Great  Britain  again,  in 
defiance  of  our  admirable  blockade,  clothed 
many  of  the  confederate  soldiers,  but  the  spin¬ 
dles  and  looms  of  the  tonstantly  increasing 
factories  of  the  South  were  each  year  supplying 
a  larger  percentage  of  cloths  for  civic  and  mili¬ 
tary  wear.  She  had  depended  on  New  England 
for  boots  and  shoes,  but  she  found  that  she  could 
tan  her  own  hides,  and  people  were  found  to 
make  boots  and  shoes.  Thomasville,  North 
Carolina,  is  the  Lynn,  though  not  the  only 


shoe  manufacturing  town  of  the  South.  With¬ 
out  detaining  the  committee  by  details  of  the 
improvement  and  extension  of  her  railroad 
system,  I  will  mention  the  fact  that  though  Vir¬ 
ginia  and  North  Carolina  had  never  been  able 
to  build  a  road  from  Danville  to  Greensboro’, 
whereby  a  central  through  route  from  North  to 
South  would  have  been  completed,  that  road 
was  built  in  the  first  year  of  the  war.  This 
increased  the  value  of  every  foot  of  a  chain  of 
roads  extending  from  Richmond  to  New  Or¬ 
leans,  and  which  now  carries  a  large  portion  of 
the  freight  passing  between  the  eastern,  States 
of  the  North  and  the  South  and  Southwest. 

But,  sir,  without  elaborating  the  point,  let 
me  state  in  general  terms  that  the  value  of  the 
lands  of  the  South  were  trebled  by  the  recog¬ 
nition  of  facts  which  the  war  compelled  the 
southern  people  to  recognize,  namely  :  that 
they  could  raise  their  own  food,  and  that  they 
had  advantages  over  those  on  whom  they  had 
hitherto  depended  for  food  for  man  and  beast 
in  the  markets  of  the  eastern  States,  Central 
and  South  America,  the  West  India  Islands, 
and  Europe.  As  cotton  and  sugar  had  been 
the  only  crop  of  the  greater  portion  of  their 
country  the  people  had  come  to  believe  that 
they  had  but  One  harvest  seasou — that  in  which 
those  crops  were  gathered  and  prepared  for 
market.  But  when  the  armies  of  the  confed¬ 
eracy  had  to  be  fed  from  the  fields  within  its 
lines  they  discovered  that  they  had  three  har¬ 
vest  seasons — the  spring  for  wheat  and  grasses, 
summer  for  corn,  and  autumn  for  cotton  and 
sugar.  And  in  this  very  year  many  a  broad 
acre,  after  having  yielded  its  golden  harvest  of 
wheat,  will  have  the  stubble  turned  under  and 
be  planted  in  corn  that  will  mature  before  the 
frost  threatens  it.  The  necessities  of  the  war 
also  taught  them  the  value  of  deep  plowing, 
fertilizers,  and  of  keeping  procreative  stock  for 
the  work  for  which  they  had  kept  only  mules 
in  the  past.  As  an  illustration  of  the  value  of 
these  discoveries,  let  me  say  that  it  is  within 
my  knowledge  that  Mr.  McDonald,  of  Con¬ 
cord,  North  Carolina,  in  order  to  settle  the 
question  of  the  value  of  deep  plowing  and 
the  application  of  phosphates  in  the  produc¬ 
tion  of  cotton,  tried  two  experiments  on  fields 
which  together  embraced  one  hundred  acres 
of  land  that  had  ever  been  regarded  as  too 
poor  for  cotton  land.  Wishing  to  make  the 
experiment  for  public  as  well  as  private  ad- 


14 


vantage,  Mr.  McDonald  took  the  opinion  of 
the  planters  of  his  section  of  the  State  as  to 
the  possibility  of  making  cotton  on  such  land, 
and  found'  no  man  among  his  neighbors  or 
visitors  who  believed  that  it  would  return  him 
the  value  of  the  seed  with  which  he  would 
plant  it.  But  with  a  heavy  old-fashioned  Penn¬ 
sylvania  plow  he  broke  the  land  and  turned  in 
a  given  amount  of  super-phosphate  to  the  acre, 
and  lo,  when  the  season  came  for  gathering 
cotton  he  had  the  demonstration  that  the  poor¬ 
est  land  in  Cabarras  county  had  been  made  to 
yield  the  finest  crop  of  cotton  ever  raised 
within  her  limits,  and  which  many  of  her  citi¬ 
zens  pronounce  the  finest  ever  raised  in  North 


breadstuffs  and  meats,  which  maintain  former  prices 
on  account  of  their  scarcity.  Judgments  are  passed, 
execution  sales  are  common,  the  bankrupt  law  is 
taking  hold  of  estate  after  estate,  property  of  all 
kinds  is  rapidly  falling  in  price,  lands  are  changing 
hands  and  will  soon  be  knocked  off  for  a  mere  song; 
and  there  is  no  prospect,  so  far  as  we  can  see,  that  this 
condition  of  things  will  speedily  improve.  One  of 
the  first  effects  will  be  to  greatly  restrict  if  not  abol¬ 
ish  the  credit  system.  Every  step,  no  matter  how 
painful  or  how  much  to  be  deplored,  is  in  that  direc¬ 
tion.  Credit  is  based  on  confidence  between  man 
and  man,  and  where  there  is  no  confidence  there  can 
be  no  credit.  The  end  will  be  that  a  large  majority 
of  our  people  will  find  it  impossible  to  meet  their 
obligations,  and  must  have  indulgence  in  some  way, 
or  the  hard  earnings  of  many  years  will  be  sacrificed 
under  the  sheriff’s  hammer  or  in  courts  of  bank¬ 
ruptcy.” 

And  a  correspondent  of  the  New  York  Tri¬ 
bune,  writing  from  Hinesville,  Liberty  county, 
Georgia,  last  month,  says: 


Carolina.  The  many  intelligent  planters  who 
observed  this  experiment  now  know  that  by  the 
aid  of  proper  implements  and  adequate  stimu¬ 
lants  to  the  soil  their  fields  maybe  made  to  yield 
a  handred  per  cent,  more  cotton  than  they  ever 
have  yielded,  and  that  with  but  fifty  per  cent, 
of  .the  labor  hitherto  applied. 

But,  as  I  have  before  said,  the  people  of  this 
wonderfully  endowed  section  of  our  country 
wore  without  a  circulating  medium.  This  was 
their  paramount  necessity.  For  the  want  of  it 
all  their  interests  were  suffering.  The  Commis¬ 
sioner  of  Internal  Revenue  suggests  that  our 
condition  is  such  that  u  soothing  and  sustain¬ 
ing”  treatment  rather  than  the  11  heroic”  is 
most  likely  to  promote  and  hasten  our  recovery, 
and  I  beg  leave  to  inquire  whether  his  suggestion 
is  hot  much  more  applicable  to  them.  Inordi¬ 
nate  taxes  have  borne  more  heavily  upon  the 
people  of  the  South  than  upon  us,  and  contrac¬ 
tion  has  operated  with  still  more  aggravated 
Severity  upon  them,  as  whatever  redundancy 
there  may  have  been  in  our  currency  at  the  close 


“  A  sale  has  taken  place  at  this  county  seat  that  so 
well  marks  the  extreme  depression  in  the  money 
market  that  I  send  you  the  particulars:  Colonel 
Quarterman,  of  this  county,  deceased,  and  his  exec¬ 
utor,  Judge  Featter,  was  compelled  to  close  the 
estate.  The  property  was  advertised,  as  required  by 
law,  and  on  last  court  day  it  was  sold.  A  handsome 
residence  at  Walthourville,  with  ten  acres  attached, 
out-houses,  and  all  the  necessary  appendages  of  a 
first-class  planter’s  residence,  was  sold  for  $60.  The 
purchaser  was  the  agent  of  the  Freedmen’s  Bureau. 
His  plantation,  four  hundred  and  fifty  acres  of  prime 
land,  brought  $150;  sold  to  a  Mr.  Fraser.  Sixty-six 
acres  of  other  land  near  Walthourville,  brought  throe 
dollars;  purchaser,  Mr.  W.  D.  Bacon.  These  were 
all  bona  fide  sales.  It  was  court  day,  and  a  large  con¬ 
course  of  people  were  present.  The  most  of  them  were 
large  property  owners,  but  really  had  not  five  dollars  in 
their  pockets,  and  in  consequence  would  not  bid,  as  the 
sales  were  for  cash.  In  Montgomery,  Alabama,  lots 
on  Market  street  near  thecapitol,  well  located,  50  feet 
by  110  feet  averaged  about  two  hundred  and  fifty  dol¬ 
lars  each.  The  Welsh  residence  on  Perry  street,  two- 
story  dwelling  houses,  including. four  lots,  sold  for 
$3,500;  Dr.  Robert  M.  Williams  was  the  purchaser. 
The  same  property  in  better  times  would  not  have 
brought  less  than  $10,000.  The  Loftin  place,  near 
Montgomery,  containing  one  thousand  acres,  was 
recently  rented  at  auction  for  forty  cents  an  acre. 
The  same  lands  rented  the  present  year  for  throe 
dollars  an  acre.” 

It  is  proper  that  I  should  admit  that  some¬ 
thing  of  this  depression  is  due  to  the  resistance 
leading  men  of  the  South  present  to  her  con¬ 
stitutional  restoration  to  the  Union  and  the 


of  the  war  would  have  been  absorbed  by  the  invit¬ 
ing  fields  of  enterprise  offered  by  the  South,  and 
would  have  gone  there  to  quicken  her  resources 
and  enable  her  people  to  consume  dutiable 
goods  afid  those  from  which  internal  revenue 
is  collected  by  the  sale  of  stamps.  That  the 
productive  power  the  war  developed  in  the 
South  has  been  suppressed  by  lack  of  cur¬ 
rency,  and  that  by  contraction  we  are  abstract¬ 
ing  from  her  people  the  little  they  had  is  be¬ 
coming  apparent  to  every  observing  man.  We 
find  evidence  of  it  in  every  paper  that  comes 
from  the  South.  The  Standard,  (Raleigh,  North 
Carolina,)  of  the  4tli  instant,  says  : 

“Everything  seems  to  have  fallen  in  price  except 


hostility  the  baser  sort  of  her  people  exhibit 
toward  northern  settlers ;  yet  there  are  wide 
sections  of  the  country  into  which  northern  men 
ma}’-  go  and  find  themselves  welcomed  as  bend- 
factors  if  they  go  to  engage  in  any  industrial 
pursuit ;  aud  it  must  also  be  admitted  that  under 
our  present  scale  of  taxation,  and  with  the  Sec¬ 
retary  of  the  Treasury  constantly  threatening 
contraction  and  able  to  execute  his  threat,  that 
capital  will  not  engage  in  any  new  enterprise 
either  North  or  South. 

Commissioner  ^rells  is  right  in  prescribing 
11  soothing  and  sustaining”  rather  than  11  he¬ 
roic”  treatment  for  our  diseased  body-politic; 
and  if  the  capitalists  of  the  country  do  not  wish 


15 


to  swell  the  cry  of  repudiation  till  it  shall  be¬ 
come  the  shibboleth  of  a  party  they  had  better 
abate  their  demand  for  the  further  contraction 
of  the  currency  and  consent  to  the  repeal  of 
taxes  that  are  proving  the  correctness  of  Dean 
Swift’s  proposition  that  “  We  can  double  the 
taxes  and  diminish  the  income  one  half.”  The 
rapid  development  of  the  wondrous  resources 
of  our  country  and  recuperation  of  the  South 
will,  under  happier  conditions,  soon  swell  the 
volume  of  our  exports  beyond  that  of  our  im¬ 
ports  and  enable  us  to  recall  our  bonds  from 
Abroad  in  exchange  for  commodities,  and  resume 
specie  payments  without  grinding  into  bank¬ 
ruptcy  or  beggary  the  men  of  enterprise  and 
laborers  of  the  country.  In  refutation  of  the 
favorite  theory  of  the  contractionists  that  the 
price  of  gold  regulates  the  price  of  domestic 
productions  I  pause  to  refer  to  the  fact  that  the 
difference  between  gold  and  greenbacks  widens 
daily,  yet  the  purchasing  power  of  a  greenback 
is  now  for  almost  every  article  of  home  pro¬ 
duction  twice  what  it  was  when  the  bulk  of  our 
bonds  were  subscribed  for,  and  is  increasing 
coevally  with  a  steady  rise  in  the  price  of  gold. 
The  suit  of  clothes  in  which  I  stand,  and  which 
I  know  to  have  been  woven  from  pure  Ohio 
wool,  was  bought  for  forty  dollars  in  green¬ 
backs  ;  not  from  what  is  called  a  slop-shop,  but 
from  the  merchant  tailors  who  have  made  my 
clothes  for  years.  In  1804  it  would  have  cost 
twice  that  sum.  Many  styles  of  cotton  goods 
which  were  commanding  an  advance  of  four 
hundred  per  cent,  at  that  time  are  now  selling 
at  prices  less  than  those  they  brought  before 
the  war.  If  any  gentleman  be  disposed  to  dis¬ 
pute  the  increased  general  purchasing  power  of 
greenbacks,  irrespective  of  the  price  of  gold, 
I  recommend  him  to  examine  pages  42,  43,  and 
44  of  the  Report  of  the  Special  Commissioner 
of  Revenue.  He  will  there  find  abundant  evi¬ 
dence  of  the  fact. 

Had  Congress  at  the  close  of  the  war  has¬ 
tened  to  relieve  the  country  of  the  taxes  against 
which  I  am  protesting,  and  while  avoiding  any 
expansion  of  the  currency  protected  its  volume 
from  diminution,  and  assured'  the  people  that 
no  essential  change  in  its  volume  should  be 
made  until  the  business  of  the  country  had 
adjusted  itself  to  the  conditions  of  peace,  pro¬ 
duction  would  have  advanced  and  our  bonds 
would  have  been  returning  to  us  in  the  p*ockets 
of  emigrants  or  in  settlement  of  a  favorable 


balance  of  trade,  and  millions  of  people  North 
and  South,  who  are  to-day  eating  bread  they 
have  not  earned,  would  have  been  busily  em¬ 
ployed  and  adding  to  the  nation’s  wealth  by 
earning  each  day  more  than  they  consume.  A 
gradual  decline  in  prices  was  inevitable,  but  it 
would  not  have  destroyed  confidence  and  sus¬ 
pended  production,  and  with  immensely  in¬ 
creased  production,  both  agricultural  and  man¬ 
ufacturing,  there  would  have  been  no  cry  of  a 
“glut  in  the  market.”  The  people  of  the  South, 
whose  agricultural  stock  and  implements,  fur¬ 
niture  and  apparel,  were  exhausted  during  the 
war,  would  have*  been  supplying  their  wants  by 
the  sale  of  the  results  of  their  industry.  Under 
the  influence  of  northern  capital  and  enterprise 
water-power  that  now  runs  to  waste  through 
cotton  fields  would  have  been  moving  spindles 
and  looms.  Forges,  furnaces,  and  rolling-mills 
such  as  those  the  war  developed  at  Chatta¬ 
nooga,  Atlanta,  Lynchburg,  and  other  points, 
would  be  in  profitable  operation,  and  by  sup¬ 
plying  merchantable  iron  diminishing  our 
dependence  upon  England  and  keeping  down 
that  balance  of  trade  which  with  the  interest 
on  our  bonds  held  abroad  must  prevent  the 
resumption  of  specie  payments  as  long  as  we 
continue  the  “heroic”  treatment  of  sacrificing 
all  other  interests  in  order  to  give  increased 
value  to  the  hoarded  wealth  of  the  possessors 
of  “  realised  riches.”  An  increasing  demand 
for  skilled  labor  in  the  South  would  also  be  a 
powerful  agent  in  the  works  of  reconstruction 
and  the  redemption  of  the  country  from  finan¬ 
cial  embarrassment. 

Mr.  Chairman,  Bishop  Kingsley,  in  one  of 
his  admirable  letters  from  Europe,  from  Swe¬ 
den,  I  think,  stated  that  there  were  ten  mil¬ 
lion  industrious  people  in  Europe  eager  to 
leave  their  fatherlands,  cross  the  Atlantic, 
and  identify  themselves  with  us.  This  state¬ 
ment  seemed  to  bear  the  aspect  of  exaggera¬ 
tion,  but  is  confirmed  by  the  judgment  of 
every  judicious  traveler  with  whom  I  have 
conversed.  We  have  room  for  them  all ;  we 
need  them  all,  and  could  give  them  “ample 
room  and  verge  enough”  in  which  to  live 
prosperously  could  the  navies  of  the  world 
bring  them  all  to  us  in  a  single  year.  We 
need  them  on  our  vine  and  pasture  lands  and 
our  grain-fields ;  in  our  forests,  our  mines, 
and  our  ore-beds.  We  want  the  industrial 
secrets  and  experience  they  possess,  but  which 


16 


have  not  been  introduced  into  our  country. 
We  need  them  to  guide  our  magnificent  water 
powers  running  to  waste,  and  so  harness  them 
that  they  shall  labor  for  us  as  they  speed  their 
way  to  the  sea.  But  would  they  better  their 
condition  to  come  to  us  at  this  time?  I  fear 
not.  Most  of  them  can  live  where  they  are, 
and  are  used  to  the  ills  they  suffer ;  but  could 
they  hope  to  prosper  as  strangers  in  a  strange 
land,  in  which  there  is  not  adequate  employ¬ 
ment  for  the  native  workingman ;  in  which 
that  most  powerful  of  productive  agents,  the 
steam-engine,  is  idle  and  powerless,  and 
machinery  is  decaying  in  inaction,  because 
the  Government  arbitrarily  interferes  with  a 
volume  of  currency  to  which  all  values  had 
adjusted  themselves,  and  which  as  a  medium 
of  exchanges  in  internal  trade  was  enhancing 
the  wealth  and  power  of  the  nation  in  a  ratio 
unprecedented  in  its  history  or  the  history  of 
the  world? 

Sir,  it  is  in  the  power  of  Congress,  by  reani¬ 
mating  ‘the  industry  and  restoring  the  confi¬ 
dence  of  the  country  before  the  sun  of  May  shall 
have  fitted  the  fields  of  the  North  for  the  plow, 
to  prepare  a  welcome  for  all  these  people  who 
may  be  able  to  come  to  us.  I  have  indicated 
the  principal  measures  by  which  this  is  to  be 
done.  There  are  other  measures  suggested  to 
which  I  would  gladly  allude,  but  for  the  discus¬ 
sion  of  which  the  future  will  offer  more  fitting 
occasions.  I  have  no  fear  for  the  distant  future. 
There  is  nothing  in  our  condition  to  justify  a 
dread  of  repudiation.  We  are  not  poor  and 
exhausted,  but  are  richer  than  we  or  any  other 
people  ever  were.  I  have  shown  that  the  coun¬ 
try  was  richer  at  the  close  of  the  war  by  a  newly 
created  productive  power  far  more  than  equal 
to  the  entire  indebtedness  created  by  the  war. 


I  have  pointed  to  the  fact  that  the  South,  now 
the  home  of  freedom,  will  under  its  inspira¬ 
tion  be  no  longer  a  burden  upon  the  exchequer 
of  the  country  for  her  postal  system  and  other 
Government  service,  as  she  has  hitherto  been, 
but  will  contribute  as  liberally  to  its  income  as 
the  most  prosperous  portions  of  the  North 
have  done  or  will  do.  Contraction  of  the  cur¬ 
rency  and  excessive  taxation  have  temporarily 
diminished  our  productive  power,  and  may  pro¬ 
duce  a  period  of  most  unhealthy  agitation,  but 
the  strife  waging  in  our  midst  is,  as  I  have  shown, 
the  offspring  of  the  natural,  desire  of  the  pos¬ 
sessors  of  riches  to  expedite  and  increase  their 
profits.  But  we  are  not  here  to  legislate  for 
them  beyond  the  protection  of  their  just  rights. 
Our  charge  is  far  nobler  than  that;  it  is  the 
welfare  of  a  great,  intelligent  and  enterprising 
people.  Justice  to  all  will  injure  none,  and  by 
laboring  to  promote  the  welfare  of  the  poor  and 
lowly  we  will  do  most  to  protect  the  property 
and  guaranty  the  rights  of  those  whose  estates 
are  largest.  Were  it  in  our  power  and  within 
the  scope  of  our  functions  to  organize  a  system 
of  cooperation,  or  by  any  other  means  to  har¬ 
monize  the  conflict  between  labor  and  capital — 
employer  and  employed — it  would  confer  the 
highest  blessing  upon  our  country  and  give  sta¬ 
bility  to  every  interest.  There  is,  could  we  but 
discover  it,  a  solution  of  that  difficult  question, 
and  let  us  hope  that  with  our  vast  wealth,  our 
immense  bodies  of  public  land,  the  intelligence 
and  enterprise  of  our  people,  we  may  solve  the 
difficult  problem  and  by  the  the  happy  condi¬ 
tion  of  our  people  compel  the  rulers  of  the  Old 
World  to  follow  our  example  and  guaranty  to 
every  citizen  of  their  countries  the  right  to  exer¬ 
cise  every  privilege  and  prerogative  of  a  free¬ 
man. 


